How to Avoid Under-Coding in Medical Billing

In medical billing, it is your responsibility as a biller/coder to abstract all billable codes from the medical record. Failing to identify billable codes (under–coding) is referred to as leaving money on the table. And leaving money on the table will get you fired. Want to understand and avoid under-coding? Read on.

As bad as under-coding is, over-coding is just as bad. When payers discover later that a claim was over paid, they’ll ask for the money back, usually in the form of a demand letter that describes the over payment and explains why the payment should be returned. If the payment isn’t returned, the payer uses the over-payment as an offset to future claims, in what is known as a take-back.

Take-backs are a challenge to the payer, but they’re even more of a challenge for the provider because convincing a payer that the overpayment doesn’t actually exist can be difficult. When the payer has already used the perceived overpayment toward future claims, the ledger can get pretty messy.

Some states have laws that define the number of months that can pass in which an overpayment refund can be requested. These state laws don’t apply to federal plans. Some state laws also define the time frame in which carriers can request payment returns. Make sure you know the laws of your state.

You must catch any and every service in the provider’s record and code it accordingly. Unfortunately, although the coding software your provider uses may help you identify a lot of oddities in the claim, such as unbundling, it won’t help you identify under-coding. To do that, you have to rely on your coding skills, because you’re the last line of defense against leaving money on the table.

If your employer doesn’t use coding software, the National Correct Coding edits are available on the Medicare website as well as most of the Medicare contractor websites. Other sources include coding companion publications that usually indicate procedures that are inclusive to a particular code.

Under-coding errors often result from a misunderstanding about what can and can’t be bundled. Although you don’t want to over-code, you do want to look critically at every procedure so that you can determine whether you can code it separately.